Healthcare Costs: A Real Example

A big concern for cancer patients, consumers, and anyone ever having to seek medical intervention or care is the amount we pay for it. There is a lot of “fluff” in the media today about Obamacare, Employers, Healthcare Reform, Emergency Room visits, and many other things that all are effectively working to potentially drive up the cost of care.

However, I want to point out a real life example, in  the highly competitive landscape of Pittsburgh, PA. This example is not only real, it is current, and is a microcosm of what impacts all of us, and the price we pay.

UPMC (University of Pittsburgh Medical Center) operates the Arnold Palmer Cancer Center, Excela owns the property, and Highmark provides coverage for a large portion of the community.

UPMC is a provider of medical services, in this case, cancer services. It is an outpatient facility (clinic), but it bills under the umbrella of the hospital. Why does this matter and why do we care? Well the price you pay and the amount UPMC is reimbursed are all based on the location of services. Costs for drugs are different if a hospital or freestanding facility purchase them. The amount they are reimbursed by the payer, in this case Highmark is different as well. Same for surgery, radiation oncology, etc.

Highmark is the insurance carrier or payer. They obviously cover lives, and based on the total pool of covered lives, they will hopefully make more money on premiums and what employers pay for coverage than what they have to pay out to places such as UPMC. In addition, the longer they hold onto the money, the more money they make based on interest and diversification.

Excela in this case I believe owns the property, the building, and it may or may not own some of what is inside the building based on arrangements on business etc. In this case, they may be an innocent bystander, at least in the beginning.

Now that we know all the characters we can get to the real meat of the battle of capitalism. (article)

Here are the real so what’s:

1. I am a patient, I unfortunately get sick. I have Highmark as my coverage and based on where I live and my policy I have to go see a doctor as part of the UPMC network.

2. I go to the doctor and after a series of tests he tells me I have cancer. Not to mention that I am scared and fear dying, I now have to go to a cancer center and get treated.

3. I assume that physicians have checked to make sure the oncologists are “in-network” but because I am savvy I check and am informed that they are, so I proceed.

4. See doctors, decide on treatment, begin treatment (I am fast forwarding to get to the climatic insight)

5. UPMC has already double checked with Highmark to ensure that I am pre-certified. This means that UPMC has called and checked to ensure that the treatment, services, and drugs will be paid by Highmark once the bill is submitted.

6. UPMC moves forward, orders drugs, begins providing services for my treatment. They submit bill to Highmark.

7. Highmark decides to “deny” the bill based on a technicality. The bill was most likely submitted on a UB-40 versus another type of bill (or vice versa), and so they decide to deny payment to UPMC.

8. UPMC sees that a denial has come to them. They need to review the reason for denial, correct, resubmit.

9. Highmark in this case, denies again. The cycle continues.

10. After two or three tries, the bill will get sent to collections, and the patient now becomes responsible for the bill.

11. UPMC will have a financial counselor that I am sure will work with me to get this straight, delay payment, place it in suspension, perhaps see what my portion will be and work with me to only pay that portion until the rest gets figured out. Or……

12. It is sent to collections and I am responsible for the entire bill.

13. I not only have cancer, am being treated, trying to deal with family, emotions, loss of work potentially, but now I have to deal with the potential of a $100,000 bill or more.

14. Highmark still has the money my employer has paid to cover my family and I, plus the money I have paid in on a bi-weekly basis. That money is collecting interest or making more money for Highmark.

Costs:

UPMC has the normal day to day costs of doing business in healthcare. However, they spend a lot of “waste” in dealing with billing. Who to bill, how to bill, denials, claims, forms, various coverage, resubmission, financial counselors, collections, verification paid correctly to name a few. A lot of man hours, salaries, and time away from caring for patients, the core of their business.

Highmark: again normal day to day business of covering people. They too spend a lot of time and money to get out of paying legitimate bills. Claims processor, denials, verification, pre-certification, re-certification, forms, review boards, appeal boards, so on and so forth. Again, a lot of time and money outside of their core business which is to cover lives.

Excela: perhaps I work for Excela and now they have to deal with me, an upset employee and patient who not only has been out of work, but upon my return I am not 100% because I returned before I was ready, I am also working a second job to help pay for my cancer bill. I am not as productive at work, my work suffers, I miss an important deadline that maybe costs Excela money. Again, a waste and moving further away from the core of my business.

Moral of the story: When we consider paying dividends back to our investors, it sometimes hampers doing what we are in the business of doing, the core of our business. In this case, UPMC can handle it since they are a global healthcare provider and are very business savvy. Highmark continues to pay dividends and makes money as an insurance provider. Excela will continue on.

At the end of this value chain is me. The one person that everyone should be worrying about is the one person that gets left behind. I am left to figure it out. To find a way. To understand business and complexity that is out of my domain expertise. Financially I do not have the ability to absorb it. Emotionally I should not have to absorb it. Physically I may not be able to after battling for my life.

We are the only industrialized nation where this occurs. Any other industrialized nation where a patient seeks care, has coverage, and a bill is submitted, they are always paid. Paid on time too.

You can see where the costs arise and come from due to everyone wanting to make a dollar.

I, the patient, am the one paying the price of costs in healthcare.

As always, you can feel free to contact me at: CANCERGEEK@GMAIL.COM

~CancerGeek
@cancergeek

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